Capital Hurdle Rate Calculation Definition

Below please find a definition of “Capital Hurdle Rate Calculation”

Financial Analysis Training & Glossary TermsCapital Hurdle Rate Calculation: The minimum return necessary for a fund manager to start collecting incentive fees. The hurdle is usually tied to a benchmark rate such as Libor or the one-year Treasury bill rate plus a spread. If, for example, the manager sets a hurdle rate equal to 5%, and the fund returns 15%, incentive fees would only apply to the 10% above the hurdle rate.

Free MP3 Download:  To download our free 35 minute audio interview with expert Richard C. Wilson on how to succeed in the field of finance please click here.

Fast Financial Training: If you want to take your finance or business career to the next level you should explore our financial analysis certification program, or our training programs on financial modeling, investment banking, hedge funds, or private equity. All of these programs are offered on http://BusinessTraining.com

Expand Your Financial Vocabulary: Read more finance terms and definitions

Tags:  Capital Hurdle Rate Calculation, Hurdle Rate, Capital Hurdle Rate, Hurdle Rate Calculation, What is a Hurdle Rate?, What are hurdle rates?, define hurdle rate, hurdle rate definition

About Richard Wilson